I haven't really blogged about the Chinese toy recalls, not knowing much about them. However, my first thought on hearing the problems described was, "aren't those design defects, not manufacturing issues?" I had a strong sense that populist distrust of trade with China was being used as a fig leaf to cover Mattel's screw-ups. Several of the recalls were for parts such as magnets that were small and could be swallowed. There was no implication that the magnets fell off because they were attached or manufactured poorly, they were just a bad design.

I have worked in a number of large manufacturing companies that have plants and suppliers in China. It was out responsibility to make sure the product that got to the customer was correct. There is no way we would source a product from an independent foreign company, and have the product delivered straight to stores without inspection, unless we were absolutely damn certain about the company's processes, up to and including having full-time manufacturing people at their plant.Well, I might have been on to something (WSJ$)

Toymaker Mattel
issued an extraordinary apology to China on Friday over the recall of
Chinese-made toys, saying most of the items were defective because of
Mattel's design flaws rather than faulty manufacturing. The company
added that it had recalled more lead-tainted Chinese toys than was
justified....

Mattel ordered three high-profile recalls this summer
of millions of Chinese-made toys, including Barbie doll accessories and
toy cars, because of concerns about lead paint and tiny magnets that
could be swallowed. The "vast majority of those products that were
recalled were the result of a design flaw in Mattel's design, not
through a manufacturing flaw in China's manufacturers," Mr. Debrowski
said. Lead-tainted toys accounted for only a small percentage of all
toys recalled, he said. "We understand and appreciate deeply the issues
that this has caused for the reputation of Chinese manufacturers," he
said.

Mattel said in a statement its lead-related recalls
were "overly inclusive, including toys that may not have had lead in
paint in excess of the U.S. standards. The follow-up inspections also
confirmed that part of the recalled toys complied with the U.S.
standards."

The other interesting thing here is just how important Mattel's relationship with China is, to have even issued this apology at all. For such a massive and high-profile recall, Mattel came off very well through the succesful strategy of blaming China. I know that parents I have heard talk about the recall blame China and have increased fear of Chinese products. So it is interesting to see that Mattel feels the need to abandon this so far winning PR strategy.

5 Comments

Mattel must have realized that their strategy was successful on the short term, but horrible on the long.

The successfully diverted the blame away from their design and product quality inspection processes onto "Chinese Manufacturers", saving them some face.

But now everyone is questioning the safety of all toys made by "Chinese Manufacturers". This is bad, because we in the US don't differentiate between Chinese manufacturers. They're all the same in our eyes, there is no brand differentiation between plants or even regions. Just this amalgam idea in our heads of millions of smoke-belching factories full of teenage girls working 100 hours a week for a nickle a day

Well, since the Chinese are famously bad at developing brands, this is a win-win strategy: it preserves Mattel's brand by blaming the Chinese, and then preserves Mattel's relationship with an under-the-radar mea culpa. In the end, the perception is that mistakes were made, but not by anyone important.

Ames Tiedeman:

In the U.S. interest rate are going lower, Gold is going higher, Oil is going higher, inflation is going higher, the dollar is going lower. What is wrong with this? Everything! At some point the FED is going to have to raise rates bigtime. We are in a very, very, precarious situation at the moment. I think Gold will tripple to over $2,000 an ounce when the market finally wakes up and sees the real inflation. Last I checked a lower dollar = higher import prices. There is no inflation deflator here. With commodities on fire you can forget about that. Bernanke should have never lowered rates last week. However, the Fed might be doing something that few have talked about. Maybe the Fed has abandoned the dollar to crush the trade deficit. Good luck, it will take 20 years to correct our 6% of GDP trade deficit and move it back to under 1% of GDP, unless you want to seriously disrupt the global economy. We are in for tough times people. Very tough! The FED will not be able to save housing with lower rates. We are in for a 10 year decline in home prices. It is called a cycle!

I don't think this mea culpa can be called "under the radar." It was very public. I offer kudos to Debrowski for figuring out what the right thing to do was, then doing it. Dealing with your problems honestly is the only way to move forward, especially with a large, complex, supply chain that depends on good information to function.

By the way, the religious services this weekend reminded me of where our phrase "scapegoat" came from. It's from the story of Yom Kippur where Aaron was to make up to God for the sins of his (already smote) adult children. He was to prepare two goats. The goat for God would be sacrificed on the altar. The goat for Azalel would have the community's sins placed on its head and sent into the desert (the scape-goat). Not being that religious, I had a hard time deriving the moral, except perhaps that there are worse things to be in this world than a scapegoat.